Quick Summary
The revenue impact of tax deductions availed by individual taxpayers for donations to political parties has witnessed a sharp surge post-Covid-19, surpassing corporate contributions in the two financial years leading up to the 2024 Lok Sabha elections. According to the Statement of Revenue Impact of Tax Incentives under the Central Tax System in Budget 2025-26, individual and Hindu Undivided Family (HUF) taxpayers claimed tax benefits worth ₹2,275.85 crore under Section 80GGC of the Income Tax
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FAQ :
Individual taxpayers, along with Hindu Undivided Families (HUFs), have shown a sharp surge in political donations, surpassing corporate contributions in recent financial years.
Corporate taxpayers can claim deductions under Section 80GGB, while individual taxpayers and non-corporate entities can avail deductions under Section 80GGC of the Income Tax Act.
Individual and HUF taxpayers claimed tax benefits worth ₹2,275.85 crore in FY23 under Section 80GGC.
The tax benefits claimed by individual and HUF taxpayers are projected to rise by 12.36% to ₹2,557.15 crore in FY24.
Corporate taxpayers claimed deductions of ₹514.40 crore in FY23, with a projected increase to ₹577.98 crore in FY24, significantly less than the amounts claimed by individuals.
Over the past decade, since FY15, the estimated revenue impact of tax concessions on political donations has totalled ₹14,473.75 crore.
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